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No one is disrupting banks – at least not the big ones

popularfintech.com

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Re: No one is disrupting banks – at least not the big ones

#311

Post by JumpCrisscross »

ty6853 wrote: post #300
JumpCrisscross wrote: post #292

Earlier quoted context omitted.

> Buy gold bullion, rent a bank safe deposit box, store it there This is the worst of all worlds. You have a high-transaction cost volatile asset in a box which provides you with less legal protection than crap stored in a home with renter’s or homeowner’s insurance [1]. [1] https://www.nytimes.com/2019/07/19/business/safe-deposit-box...

Renter/homeowner insurance rarely cover precious metals unless they are in their highest premium ( read worst as store of value ) forms as jewelry or kitchenware. A vault with stronger property rights than US and insurance is probably better than your house (Singapore insured PM vault maybe) but not as good as a hole in the ground somewhere where metal detectors get a lot of false positives somewhere remote with no a…

> Renter/homeowner insurance rarely cover precious metals unless they are in their highest premium ( read worst as store of value ) forms as jewelry or kitchenware

You're already paying a double-digit round-trip spread on retail gold. The point is out of all the places you could put physical gold, safe-deposit boxes max out the worst attributes.

Re: No one is disrupting banks – at least not the big ones

#312

Post by elric »

US banks are weird [1]. Archaic. Slow. Filthy rich. Incompetent. And yet they're nearly impossible to disrupt due to the benefit of size. Starting a new bank is expensive, unless you want to pretend at being a real bank and letting another bank handling all of the nitty-gritty details. In which case you've now become a reseller of that bank, and will likely be even worse.

The only thing that can disrupt US banks is consumer outrage, of which there seems to be very little.

[1] Source: I've consulted for some of the largest US, European and African banks.

Re: No one is disrupting banks – at least not the big ones

#314

Post by tcgv »

aketchum wrote: post #262
biohcacker84 wrote: post #261

Uhmm... isn't that what crypto is basically? Per Mark Marc Andreessen the Biden admin tried to shut down crypto entirely But with the new administration we'll hopefully see growth and real competition to the old banks.

I’m not being a troll I’m seriously asking - how does crypto replace banks? Am I going to get a mortgage in BTC? If narrow banking, why give them my btc at all instead of holding myself? If not narrow banking then they are lending out my btc? Does that even work on blockchain? How do you do fractional reserve lending with a deflationary and one of one asset?

> how does crypto replace banks?

Crypto can replace some banking functions, such as payments, electronic transfers, and lending/borrowing.

One could argue that crypto eliminates the need for traditional checking accounts since you have full control over your funds with private keys. However, this doesn’t account for the legal safeguards and protections that banks provide.

> Am I going to get a mortgage in BTC?

I don’t recall seeing mortgage services in crypto yet. However, there are borrowing platforms like AAVE, primarily used for leveraging crypto investments or speculation. These platforms are decentralized, with strict collateral requirements, typically limiting borrowing to 80% of your collateral.

> If narrow banking, why give them my btc at all instead of holding myself?

Not sure I fully understand your question, but typically, when you lend your crypto to a service, you’re seeking to earn a yield in exchange for the risk of lending your assets.

> Does that even work on blockchain?

Theoretically, yes. You could create a narrow bank using crypto, but you’d need a decentralized mechanism to verify the bank’s holdings. This could involve creating an oracle (ex: Chainlink) service to confirm asset reserves.

> How do you do fractional reserve lending with a deflationary and one of one asset?

Instead of using deflationary assets like BTC, fractional reserve lending could rely on stablecoins, which are better suited for such systems. That said, not all stablecoins are equally reliable.

Re: No one is disrupting banks – at least not the big ones

#315

Post by dr-detroit »

bArray wrote: post #305

What does "disruption" look like in the banking space? Banks want the perception of immovable, confidence, reliable, resilience, etc. It's what gives them the credibility to move big money. They don't want to "move fast and break things". Some may think about digital currencies. My warning is this: Be careful what you wish for. If we were to switch to a full digital currency, there are significant concerns that money…

[dead]

Re: No one is disrupting banks – at least not the big ones

#316

Post by openrisk »

Both "disruption" and "banks" are very broad terms. The three common subtypes of banks (retail, commercial, investment) live in different planets as far as infrastructure, products, business models etc.

So called "fintech disruption" typically concerns just retail banking and is basically just: use an "app" instead of physical branches to cater to the mobile-native generations. Nothing that any old bank cannot also implement as an alternative channel.

Real disruptions do happen every once in a while and involve new financial products and business models (securitisation, derivatives etc.). But these are typically driven by legal rather than digital innovations.

Re: No one is disrupting banks – at least not the big ones

#317

Post by psunavy03 »

ty6853 wrote: post #269
biohcacker84 wrote: post #264

Earlier quoted context omitted.

US Banks are much worse at serving common people than many other old big banks around the world, certainly compared to Germany's banks for example. And yes it is thanks to a byzantine system of history, regulations and very few Americans travelling abroad to experience radically better systems.

FATCA makes Americans pariahs at foreign banks. I would love to store cash outside US jurisdiction but it is a compliance nightmare usually only worth it for high net worth clients. We know better systems exist, we just often can't use them even when we live overseas. Crypto is the last offshore banking for the middle class. It essentially took over right when FATF eliminated banking privacy and bearer shares -- whic…

Crypto is not banking.

Re: No one is disrupting banks – at least not the big ones

#318

Post by JumpCrisscross »

nradov wrote: post #303
Joel_Mckay wrote: post #195

Earlier quoted context omitted.

Regular mutual funds usually have higher risk and tax exposure than the ETFs... Met a lot of bums in suits trying to sell me on several flavors of BS over the years. lol =3

You seem to be confused about finance. There is no particular connection between a fund's risk and tax exposure, and whether it is exchange tradable or not. Some regular mutual funds are very low risk. Some ETFs are very high risk. Tax exposure is largely irrelevant for 401(k), IRA, and other tax-free retirement accounts.

> no particular connection between a fund's risk and tax exposure

They seem to be posting a lot of word-salad comments, but assuming good faith, they're saying these are separate downsides of mutual funds over ETFs.

Mutual funds trade on your behalf, like an ETF, but they pass through the gains and losses. That can be painful if they realise those gains when you'd rather not have them, or crystallise losses when you don't have offsets. In this, they're correct. On risk, they're wrong--you can stuff nonsense into ETFs as comfortably as mutual funds. What they're indirectly criticising here is active versus passive management, which is its own can of worms.

The only advantage of a mutual fund over an ETF is it provides friction to trading. Otherwise, they're a vestige from the cusp of computerised portfolio management. (If you have more than ~$1 to 10mm, you should be rolling your own portfolio in most cases.)

Re: No one is disrupting banks – at least not the big ones

#319

Post by nradov »

michaelt wrote: post #302
AdamN wrote: post #237

Earlier quoted context omitted.

I don't get the need for synchronous comms at all. I can book airplane tickets, food delivery, e-commerce generally, and most other things through a web interface. Not sure why I need to talk to somebody to get a mortgage aside from Know Your Customer but even then a short signing ceremony at the end would be best.

For some people, the mortgage application process can be complicated. Maybe I'm in graduate school and my salary is called a 'stipend' and I don't get any payslips, plus I have a part-time job in sales where my base salary is very low and about 75% of my income is commission, and also my girlfriend will be helping with the mortgage, but not the deposit, and she's a Ukrainian refugee and self-employed content creator.…

That doesn't make any sense. At least in the USA, if the school is paying you then they have to issue you either a W-2 or 1099, regardless of whether they label it as a salary or stipend or whatever. Mortgage lenders are accustomed to verifying income from sources like that, it's not complicated.

Re: No one is disrupting banks – at least not the big ones

#320

Post by Spooky23 »

openrisk wrote: post #316

Both "disruption" and "banks" are very broad terms. The three common subtypes of banks (retail, commercial, investment) live in different planets as far as infrastructure, products, business models etc. So called "fintech disruption" typically concerns just retail banking and is basically just: use an "app" instead of physical branches to cater to the mobile-native generations. Nothing that any old bank cannot also i…

Exactly. Apps can be differentiators.

Also, large banks fundamentally work. People with money want excitement and disruption away from their money.

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